Oil prices dipped Thursday after the previous day’s surge as US President Donald Trump said the US ceasefire with Iran was over and ordered fresh strikes against the country following attacks on ships in the Strait of Hormuz.
Equity markets mostly rose as tech firms saw a touch of bargain-buying, with Seoul and Tokyo enjoying healthy gains in early trade.
Crude soared Wednesday when the US president – in response to tit-for-tat attacks in the region already taking place – said the fragile truce between the foes was “over”.
Washington also revoked a temporary sanctions waiver for Iranian oil.
Both main contracts soared around eight percent Wednesday, with Brent topping $80 a barrel for the first time in two weeks, fanning fresh fears of a spike in inflation and a hit to the economy.
Trump ordered new strikes Wednesday and warned of “much worse” if Tehran continues to attack vessels in the strait, through which a fifth of world oil usually passes.
Read moreHow ships are risking ‘safe’ passage through the Strait of Hormuz
“This is in retribution for yesterday’s bombing of ships by Iran,” he said in a post on Truth Social.
However, the US president said earlier that he expected the latest military flare-up to end quickly and left the door open to more talks.
He also claimed Tehran had “called a little while ago” and that the Iranians wanted “to make a deal so badly”, but did not provide further details of the call – including who was on the line.
He then went on to cast doubt over the value of any deal, calling the Iranians “sort of crazy”.
“Trump’s remarks set sparks flying – the comments underscored fears that we could see further escalation and a return to pre-MOU conditions,” said Neil Wilson at Saxo Markets, referring to the memorandum of understanding that paved the way for peace talks.
However, he added: “For what it’s worth, I don’t think this is the base case as A) Trump is wont to throw around threats and B) both sides need to return to a kind of hazy pre-war ‘normality’.”
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“But it clearly seems the risk of a total breakdown in negotiations has increased and markets are reflecting this fresh dynamic.”
Read moreHormuz domino effect: How the Middle East crisis affects food, flights and global supply chains
Both main contracts spiked more than one percent Thursday morning but erased those gains as the day wore on, though investors are staying vigilant for any further flare-up.
(FRANCE 24 with AFP)
Source: Original Article
